With increasing fuel and commodities prices sending the cost of groceries even higher, one segment of the economy is apparently trying to lend consumers a helping hand by stretching their food dollar: fast food restaurants.

According to this story carried on MSN.com, restaurants like McDonald's, Burger King and Wendy's are expanding the selections on their so-called "dollar menus" to give their customers inexpensive options and keep them coming back for more, even as the economy slows.

I admit, I do hit the drive-through to work on occasion if I'm in a hurry to get to work and need a quick breakfast. Then I started thinking about it....sure, the items on the dollar menu are cheap enough, but are they really frugal?

I can get a sausage biscuit at McDonald's for 99 cents. That's pretty cheap, as sandwiches go, but is it possible to do better than that? I sat down and figured out the price of the same item, made from scratch at home. Surely, a big company like McDonald's, which gets all of its items in bulk, can produce this cheaper than I can at home. At least, that's what I thought.

My wife makes our biscuits from scratch, using the homemade baking mix recipe that we use for a lot of our pancakes, biscuits and waffles. She probably spends about $5 purchasing all of the items needed to make the baking mix, so one biscuit is literally produced for pennies. OK, so how about the sausage?

The last one pound roll of sausage we purchased at the grocery store cost 89 cents at the discount grocer we use. Each roll contains about 8 servings. That's about 11 cents per serving. Let's say for the sake of argument the biscuit actually cost 25 cents in materials (that's on the high end). So, if I were to make the same sausage biscuit at home, I can get it for 36 cents. That's still cheaper than McDonald's dollar menu, and I have to admit, the home version tastes better, too.

A cost savings of 53 cents doesn't sound like much, and it isn't. However, if one is accustomed to eating a quick dollar menu item three times a week, that's about 100 dollars over the course of a year. That's about a week's worth of groceries in my home, for a family of four. When put into that perspective, the dollar menu doesn't seem all that frugal at all.

Of course, we should all be eating something healthier each morning than a sausage biscuit. After all, there is no such thing as frugal heart bypass surgery.

3 comments

  1. Finance Junkie // February 18, 2008 at 5:27 PM  

    Very good article.

    However, if the person making the biscuits works you should also consider what their time is worth. If you make $12 an hour then a case could be made that your free time used to cook is also worth $12/hr.

    - If you bought 4 biscuits at McDonalds it would cost you $3.96 (4*$.99). Now factor in the 10 minutes you spent in line at McDonalds. This time could be worth $2 (1/6 of $12/hr = $2). Now adding both together with a 7% tax on the biscuits you get a total cost of $6.24

    - Now if you make 4 biscuits at home, you'll spend about 30 minutes or more of your time at a cost of $6 (1/2 or your hourly wage) + the original $0.36 per biscuit costing you a total of $7.44.

    - The difference between the two indicates a cost savings of $1.20 by buying your biscuits at McDonalds. This savings is only realized if you were passing by McDonalds already and didn't spend much additional money on gas.

  2. K // February 18, 2008 at 10:31 PM  

    We just started this year: when we get fast food now we order the burgers, fried chicken or whatever entree but bring it home and pair it with a salad or pasta salad or home fries etc from home as well as our own pop or iced tea at home. Kinda helps level it out on a frugal basis and a nutritional one as well. We get our junk food cravings satisfied and there is little cooking involved.

    Enjoying your blog...thanks!

  3. SavvyFrugality // February 19, 2008 at 12:03 AM  

    When we do our baking at home, we do it in bulk. In other words, we don't make biscuits just for one meal, we make enough to last a week (they can be frozen and microwaved later). That does help save us some time later on in the week.

    When I do order a burger at a fast food place, it usually is on the dollar menu, but I don't eat fast food all that often. I really do prefer the homemade stuff.

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